Reebok has signed another UFC athlete to it’s roster. The newest addition is 20-year old Sage Northcutt. Sage Northcutt is a potential marketing phenom given his Mr. Touchdown USA looks and extensive athletic success.

Northcutt has won 77 world championships in karate and is an undefeated kickboxer.

With a 7-0 record Northcutt entered into a fighter against Bryan Barberena at UFC on Fox on January 30th of 2016. He was submitted in the second round with a widely criticized tapout because of it’s considered weakness of a choke.

Northcutt will be fighting at UFC 200.

Ringside Analysis:

Reebok is buying early on Sage Northcutt. Northcutt has a lot of potential in the octagon as a fighter and outside the octagon as a marketing figure.

The official apparel provider of the UFC has struggled creating products of the highest quality for UFC fighters but has steadily built a stable of top fighters and marketable figures. Reebok will be debuting new kits at International Fight Week.

Sage Northcutt might be going through growing pains now as he continues to gain experience. This is a deal for the long-term and could pay off pretty well for Reebok.

Letourneau fought Joanne Calderwood and came away with a loss. The real story for Letourneau is the criticisms from commenters that she struggled with getting kicks to her chest. During the fight Letourneau would cover her chest after a kick and look to the ref to call a break. According to her, the issues was with Reebok clothing.

From her instagram post:

I want to clarify something, my daughter told me what the commentators were saying during the fight, and I felt insulted. I have been practicing martial arts for 17 years, so I have no problem taking hits to the chest. It is the rule, and it isn’t worse than a low kick! My only problem during the fight is that my bra litterally slipped under my breasts. This is why I stared, embarrassed, at the referee, and I have no idea what Jojo told me, but I had to keep fighting. It seems that I was being mocked because I seemed to be complaining of blows to the breast. I think that I have nothing to prove regarding the numbers of hits I can take without complaining. Guys, would you be able to keep fighting without being distracted if one of your nuts was slipping out of your shorts? Anyway, it does not excuse my defeat, but I wanted to clarify this part of the fight!

Ringside Analysis:

Reebok has seemed to struggle upholding their end of the partnership with the UFC. They have struggled with creating accurate shirts, using clip art for shirts, and this is just the most recent example of fighters complaining about the fit and quality of the fight apparel.

The starting point for Reebok to become more successful is to better its quality. For example, when Nike is selling its products the company customizes each product for one of their top athletes and can meet the specific need of an athlete. Imagine if Tom Brady starts complaining about Under Armour shoes or Derrick Rose says his shoes hurt during games. From a PR standpoint critiques by athletes is the first thing that needs to change.

I also think that the shirts should probably look more like sleeveless surfing rash guards. I don’t believe that these changes are that difficult to make and could go a long way.

Richard Schaefer Returns To Fight Game With Ringstar Promotions

Richard Schaefer who previously was the CEO of Golden Boy Promotions has returned to the boxing business. A few weeks ago he established the company Ringstar Sports.

Schaefer had to take a break that expired in 2015 from the sport resulting from a settlement with Oscar De La Hoya at Golden Boy who sued Schaefer for $50 million for breach of fiduciary duties.

Schaefer said to USA Today:

I could have come back then, but I really wanted to take my time and do things right. The next order of business is to go and recruit the best team. I want to have the best team in boxing again, from matchmakers to operational staff, marketing staff and foreign sales.

At the same time, I want to start to have some conversations with TV networks as well. Once I have a team and sponsors and networks lined up, then I will go and aggressively pursue some of the young Olympians coming out of Rio and build them into the first generation of Ringstars.

I will also aggressively pursue promotional free agents, current or former champions and rising stars, and give them the benefit of my expertise, which always was to empower the fighters. With me, the fighters always got paid a lot more than anywhere else.

On the PBC:

I really applaud PBC and Al for what they have done. After two years. Nobody can do (what they need to get done) in two years, you have to give them five years. I hope I get the opportunity to promote these events.

Ringside Analysis:

This doesn’t come as a surprise to anyone in the boxing business. Schaefer, perhaps infamously, enjoyed doing business with Mayweather Promotions and now the mention of working with the PBC is notable. The PBC handles fighter management with what Top Rank calls “puppet promoters” operating the events in order to comply with the Muhammad Ali Act. It is possible that Schaefer will handle the promotional side of all PBC events with Al Haymon continuing to handle the fighter management, essentially creating a business partnership between the two.

PBC ratings have been concerning and maybe the help of Richard Schaefer will help the PBC change course towards being a profitable company.

The UFC and Snapchat have joined forces to create and distribute content on the Snapchat platform. The content will cover live events and give behind-the-scenes footage.
From the press release:

UFC® today announced a multi-year partnership with Snapchat through which the social media company will cover a selection of events via its ‘Live’ product. Fight fans at UFC events, that also have the Snapchat mobile app on their iOS or Android devices will have the opportunity to contribute their unique experiences through photo and video Snaps to one collective, curated Snapchat Live Story. These Live Stories will then be available for Snapchatters globally to view for 24 hours following the event.

“We’re excited to partner with Snapchat and continue to offer compelling and fun content both in-arena and globally during our major events,” UFC Chief Content Officer Marshall Zelaznik said. “We’re dedicated to supplying access to our content through the platforms that are relevant to our lives and producing global Live Stories is another way we’re consistently engaging with our fans.“

UFC currently has more than 46 million followers across all social platforms around the world. On Snapchat, UFC captures press conferences, athlete and celebrity Q&A’s, open workouts, media day events, weigh-ins, behind-the-scenes moments during Fight Nights and first-person accounts by athletes. UFC also hosts a weekly show on Snapchat entitled “Cookin’ with ‘The Menace’ featuring UFC featherweight Dennis Bermudez.

The first partnership efforts will take place during Fight Week and UFC 200 and will be in full effect by UFC 202 featuring the rematch against McGregor and Diaz.

Ringside Analysis:

Snapchat “stories” show great content created by both the events or brands themselves and the attendees of the events. When users make a video or take a photo they can upload their content to Snapchat where it is curated by the company and placed into a single story.

The company also uses filters that are geo-targeted for an event that show location and relevant designs. Also, there are some filter effects that appear on Snapchat that coincide with an event. For example, when Coachella was occurring and had a story there was a filter available that allowed people to put a flower halo around their heads. Personally, I’ve seen that filter on Facebook many times since then as people’s profile photos.

This could be a huge gain for the UFC. The UFC sells really well with the 32 and under demographic, which happens to be the core of Snapchat users. With UFC events being placed as stories on the app for everyone to see there is a tremendous amount of exposure to a “mainstream” audience that can garner new fans. However, all content needs to be geared towards a mainstream and casual sports fan audience and not a core UFC fan. There is a pretty stark difference.

I am looking forward to getting behind-the-scenes access that I otherwise would not get creating a strong value and incentive to be on Snapchat.

Keith Thurman won a close but unanimous decision, 115-113 by all three judges, over Shawn Porter who pushed the champion to the limit. It was another PBC event on a network channel during prime time. The fight drew an estimated 2.12 million viewers, which is an improvement upon the last PBC show on a network television network.

According to TV By The Numbers the program had a .5% share amongst the 18-49 demographic and a 2% share overall.

Ringside Analysis:

This event went up against a lot of other sports including an MLB game, the Olympic Trials, and came after a full day of soccer. The improvement in rating is a very positive sign as many people were deeming the PBC a failure after last week’s show that drew poor ratings.

With the fight being much of what boxing fans love about the sport the next show might draw some more viewers. The fight was electric, action-packed, and many portions of the night made it onto ESPN’s SportsCenter. The next PBC on network TV event might be indicative of how much a great fight can have on follow-up programming.

UFC Sale “Not Even” Close According To TMZ

Earlier this week Jeremy Botter reported that the UFC had closed a deal to be sold for $4.2 million to an entity consisting of WME-IMG, The Dalian Wanda Group, The Kraft Group, and Tencent Holdings. The UFC was quick to respond saying that no sale had been made in an internal memo to employees.

The original report says that the deal was finalized on a day in Hollywood but all of the stakeholders were spread out across the globe during that day, meaning it was impossible for any meeting to even take place.

TMZ also says that a deal won’t be made this week and that there’s a chance it may never happen. While negotiations are taking place “a deal isn’t even close.”

Ringside Analysis:

Jeremy Botter, who previously had a run-in with less than reliable journalistic efforts dealing with an alleged sexual assault case involving BJ Penn, has been contacted by the UFC with a letter saying that his reporting has damaged the organization. Botter has been wrong before whether it’s reporting that fights are going to happen that never come to fruition and also has alleged that certain fighters are on performance enhancing drugs.

This sounds like a good use of PR by the UFC. In all likelihood an anonymous source sent to TMZ might have been someone at the UFC whose goal was to disseminate information to cool down all the “sale finalized” stories.

The possible sale of the UFC has been one of the hottest stories in the MMA and sports business world for the last week. We’ll see if anything actually comes from it.

UFC Denies That Sale Has Been Made

It has been reported that the UFC has been sold to a combination of investors made up of The Dalian Wanda Group, WME-IMG, The Kraft Group, and Tencent Holdings.

If the rumors are true the sale would be for 100% of the company with the Fertitta brothers exiting participation in the company but Dana White staying on as President. Dave Sholler, VP of Public Relations at the UFC, said the UFC sent an internal memo to employees that a sale had not been made.

From the article the internal memo reads:

“A report today by FloCombat.com indicating that the company has been sold is false,” the email read. “This follows other false speculation in the press recently.

“Such misrepresentation of facts in the media negatively impacts our business, staff members and athletes. We have instructed our attorneys to investigate and take all appropriate legal actions against the parties publishing and contributing to these false stories.

“With International Fight Week and the historic UFC 200 rapidly approaching, we look forward to once again delivering a series of events that our fans won’t soon forget. We appreciate your hard work, diligence and commitment, and thank you for your focus as we continue to take the sport to new heights.”

Ringside Analysis:

Reading this it’s more important to look at what isn’t said. It isn’t said that the UFC isn’t up for sale nor does it say that negotiations aren’t going on. The report says that it has not been sold, leaving the door open to sell in the future.

In terms of legal mattersa reporter could be exposed to defamation, specifically libel, given that the possible damages resulted from a publishing. However, it is unlikely that anything will come of this.

Floyd Mayweather has been the highest paid athlete three of the last five years and comes in this year at #16.

Manny Pacquiao, who made a ton of money for fighting Floyd Mayweather and an international star in his own right, comes in at #63.

McGregor is the only UFC fighter on the list coming in at #85, although Ronda Rousey makes the list of highest-paid female athletes of 2016.

Saul “Canelo” Alvarez is ranked at #92 coming off a huge knockout win over Amir Khan. The biggest fight that could be made in boxing right now is Canelo against GGG.

Ringside Analysis:

Conor McGregor’s mention on the list is the most notable to me. Floyd Mayweather is obviously the biggest moneymaker in combat sports and Manny Pacquiao is one of the most famous athletes in Asia so it makes sense that they are the first two fighters named.

With McGregor and Rousey being so high we can tell that the UFC has enough money to be throwing around some serious dollars to the company’s top financial performers. The purse listings for bottom-level fighters might make the UFC the sport with the highest pay disparity in sports.

The listing in Forbes for McGregor doesn’t seem to include an extra contract he has with the UFC outside of his purse and win bonuses for actually fighting. McGregor, if all of his earnings were disclosed, would most likely be significantly higher on the list.

The two bidders are reported to be WME-IMG partnering with the Dalian Wanda Group, and China Media Capital. Rumors indicate that the bids are in-between $3.9 billion and $4.2 billion. The highest bidder would purchase the entire company meaning that the Fertitta Brothers, Dana White, and Flash Entertainment would sell off all their voting interests and ownership rights. Investors are also rumored to want Dana White to stay as President of the organization.

WME-IMG is led by Ari Emanuel, of Entourage fame, and has partnered with the Dalian Wanda Group, which is led by China’s Wang Jianlin who is valued at $35 billion. WME-IMG is attempting to fully self-finance the acquisition and has received investments from the Kraft Group and China’s Tencent Holdings, one of the largest internet companies in the world.

China Media Capital is a state-run company that has been buying many sports products such as the TV rights to China’s best soccer league.

When the first rumor came out a month ago I suspected the valuation and bid potential for ownership of the UFC would be a partial sale. The two bidders are based in China and the UFC has struggled for nearly a decade to break into the continent.

Now that it appears that the sale will be for the whole company, reportedly with Dana White staying on, the Fertitta brothers are executing their exit strategy. Any entrepreneurial venture has an exit strategy in mind and the Fertitta brothers plan to get out now. They’ve done an amazing job so far and maybe they think they’ve taken the league as far as they can and that someone else can take it to the next level, or maybe that the league is so volatile that this is selling high.

The UFC has recently hit big with Ronda Rousey and Conor McGregor. But the huge get with McGregor and Rousey is on the same coin as PPV ruts and down swings. Relative to other sports leagues the revenue streams are much more inconsistent for the UFC. The vast majority of the UFC’s revenue comes from PPV buys, which is dependent on certain fighters, and the calendar can be completely unstable due to fighter injuries and sometimes people retiring and saying thanks for the cheese. The UFC is also undergoing several lawsuits and is now fighting a Muhammad Ali Act expansion into MMA, which could have a huge impact on how the UFC does business.

Either way, the bottomline to the current owners made up of the Fertitta brothers, Dana White, and Flash Entertainment, is that they are about to be paid a lot of money. Quite the return on investment for White and the Fertittas who bought the UFC for $2 million in 2001.

Fan Duel and Draft Kings have been strongly competing against each other since daily fantasy sports became a business. The industry has fallen on tough times and now the two private companies are looking to join forces.

From the Bloomberg article:

Investors in DraftKings and FanDuel, which are privately held, have been pushing for a tie-up for some time, according to the people, who asked not to be identified as the discussions are private. The companies offer nearly identical products and spend a lot of money competing with each other; they also face the same legal challenges that threaten their business across the U.S.

New York and eight other states have banned daily fantasy sports on the premise that it is sports gambling, an activity that is illegal outside the state of Nevada. Lobbying efforts have begun with some states creating daily fantasy sports exceptions.

Ringside Analysis:

With the mounting legal fees and problems the whole industry is having to deal with it is very counter-productive for both companies to compete against each other while trying to keep their business models alive.

Madison Square Garden Co and the Kraft Group are investors in DraftKings and KKR & Co and Time Warner Inc. are investors in FanDuel.

The short term benefits will have long-term consequences. When the two companies merge there will only be one business in daily fantasy sports. This means that the company will be subject to anti-trust scrutiny. However, there is not a guarantee the two companies can merge. If daily fantasy is a cingular category instead of a subset of fantasy sports then a merger could be unlawful and thus not take place.